GBP / USD was little changed on Thursday after recovering earlier losses, but its bullish tone may be on hold after moving back within its Bolli envelope following the previous session’s US inflation data.
Despite strong U.S. CPI and PPI, the Fed remains determined not to engage in policy decisions based on what it sees as near-term transitory inflation gains, focusing instead on the jobs component of its dual mandate, employment.
Thursday’s jobless claims were on-target. a relief after Friday’s disappointing payrolls.
With noFed rates movement expected soon, sterling traders will be vigilant in parsing UK data for hints at a shift in BoE monetary policy.
Next week’s UK employment data EM will be significant.
Should UK employment data show rising employment and earnings. GBP / USD is likely to resume its upward trajectory rising above recent highs in the mid-1.41s and putting the Fêb.
24 high at 1.4240 in focus.
A less-than-stellar employment showing, inline with U.S. employment gains, would temper UK taper and rate expectations and keep GBP / USD anchored within its recent range.
